The neglected economy

On a weekend and little more of political drama, newspapers tend to forget the economic news. Financial Chronicle remains focussed:

The rupee is expected to gain momentum as exports begin to pick up helping in bridging the trade deficit. Exports are picking up from the textiles, apparels and pharma sectors. Exports for September to December 2013 are expected to touch $121.077 billion up from $97.64 billion the same time last year, according to the data collated by the Federation of Indian Export Organisations (Fieo). USA, South America and Japan are the export markets that is picking up.

RBI data released on Thursday showed India’s current account deficit (CAD) was lower than expected at $21.8 billion (4.9 per cent of GDP) but wider than the $18.17 billion or 3.6 per cent of GDP in the preceding quarter ended March 31, 2013. The trade deficit during the quarter increased due to a rise in imports and some decline in merchandise exports excluding the increase in gold imports of $7.3 billion during the quarter over the corresponding quarter last year, CAD would work out to $ 14.5 billion, which translates into 3.2 per cent of GDP.
…
India’s capital account, which includes foreign direct investment (FDI), portfolio investment and overseas borrowing by Indian companies, was a surplus of $20.8 billion in the June quarter compared with a surplus of $17.8 billion in the March quarter.

The size of India’s GDP seems to be USD 445 billion. That is roughly one USD of productive work per head per day! Even assuming that half of India’s population is not participating in the productive economy would bring that up to two USD per head per day. Isn’t that too little?